A passive rental income of RM1,000 per month

If you read The Star Property, you can learn a lot about property from there. I share with you, a conversation with two property millionaires, credited from The Star Property.

Property millionaires, Michael Tan, 34, and Juanita Chin, 39, have proven that “you don’t need large sums of capital to invest.” Both of them have achieved financial independence through property investments in just a few short years.

It is rather easy for one’s self-admiration to balloon out of proportion with a burgeoning bank balance, but Michael and Juanita remain firmly grounded and truly believe in paying it forward by sharing their strategies and success stories in their upcoming seminar.

Property millionaires, Michael Tan and Juanita Chin.

Tell us about your background and how you became involved in property investment.

Michael Tan (MT): My parents encouraged me to be a professional. You know, the likes of a doctor, engineer. I studied engineering and worked for a couple of years and then ventured into a few businesses. It took the loss of a job, two big failures and one near bankruptcy to realise that making money does not equal to keeping money.

I then decided to pursue property investment. Now, I have 12 properties valued at approximately RM2.9million.

Juanita Chin (JC): I was a bank teller earning RM400 per month. I have no degree and I only finished Form 5. But I had big dreams to be successful despite my lack of education. I first started investing in year 2003 because I wanted more time with my children. Working for long hours wasn’t getting our family anywhere. My husband, Ignatius, and I wanted a better life and not be stuck in the rat race.

After attending two life-changing seminars, we took action within a month. To date, we have 13 properties valued at RM5.6million. We now have the freedom of time, and my husband is able to pursue his passion in options trading.

How did you get to know each other?

MT: I attended a seminar that Juanita was co-sharing and spoke with her on the last day of the seminar. I consider her as my sifu (mentor) and I am very inspired by her story. Against all odds, she and Ignatius managed to be financially free.

So, is this the first collaboration between both of you?

MT: No. The first collaboration was in December 2009, for a charity event. I called Juanita to participate and she readily agreed. The second would be an upcoming seminar on 20th and 21st of March 2010.

Tell us about your first investment.

JC: We attended a RM57 property preview and learned that we can invest with little money. So we decided to try the strategy and negotiated with a property developer. We signed the SPA (Sales & Purchase Agreement) for RM5,000 for a property in Gurney Drive. The property’s lease was priced at RM450,000 and it has appreciated to approximately RM570,000 to RM580,000.

It is rented for RM3,000, while the monthly installment is RM1,800. Minus the service charge (maintenance fee) of RM200, we get a passive rental income of RM1,000.

MT: Also, mind you, she has four kids.

JC: Yes, it is important to mention that I have four kids. When we started investing, we already had two kids. The worse thing that could happen is losing money, but at least we tried. We then bought two more units on the lower floors at the same block with the same method.

MT: Also, I would like to mention that the units are not prime units or the nicest ones.

Juanita, where are your other properties located?

JC: All in Penang.

Michael, which was your first investment?

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MT: As a business person, I wanted to do different things. I took a more conservative approach. I paid RM6,000 for a low cost unit and made RM18,000 back. I shared my money-making skills with my staff as well. One of them (at his mortgage broking company) paid RM1,180 as downpayment and she made RM14,000 after three months.

JC: It is possible to start with not much and achieve great success despite limitations. Educate (yourself) and take actions. It is not always a breeze. There are obstacles but it is worth it.

So, it is safe to say that the biggest myth in property investment is that you need large sums of capital.

JC: Yes, that is the biggest myth.

Juanita, what are these obstacles?

JC: Some of them include raising cash. We have to convince the banks. If you are determined to reach your objectives, you won’t let it stop you. I live in Penang and travel to Kuala Lumpur very often. Not many people would take the trouble to travel.

MT: Tell them about your furniture shopping trip!

JC: Oh! Ignatius and I would drive all the way from Penang to KL to buy furniture. Pack it all up in our car, tie things to the roof and then drive all the way back, on the same day.

MT: I have known her for only two to three months, but I see her in KL very often. I am blessed to have met and known her.

Wow! Where do you find the energy and drive?

JC: It’s just like a mother loving a child. I don’t mind not resting. As a mother, the saddest thing is not having time for them, (or) providing more for them.

JC: The person must love property. (He/she) Must be literate about real estate or finance.

MT: Financing can be a headache. One must be able to balance financing well enough, to pay loans well. Bear in mind, our properties might be worth millions, but we also have millions in debt.

Juanita has written a book titled “Inspired To Change”. Michael, any plans to follow suit?

MT: Yes. I am planning to release my book in October this year. Soon… soon, I will start writing.

What are the key things to look out for when investing?

JC: Be practical. You need to decide on a particular location and who you are targeting. For example, if you are targeting expatriates, then buy (property) in the area where they usually are.

MT: You could identify a fixed area and buy in the same area over and over. For me, I focus on good deals in Kiara only and areas where I can attain a rental yield of 8%.

Some of the strategies include focusing on low and medium cost projects. For those who are younger and do not have much cash, start with that. There is still a demand for such units. Some people prefer commercial, so go with what works for you.

Any advice for aspiring property millionaires?

MT: Be real. Be yourself. Be grounded.

JC: Believe that it can be done. One of the other things that we hope to impart from the seminar is, “Who are you going to be when you reach your financial goals?” Success is not just about money. We take a holistic approach. We want to get there (be successful) in the right way.

Being rich is about who you have beside you at the end of the day. Surround yourself with good people.

MT: It is fulfilling as a person, to see the changes in people, to see how their lives have improved. I hope to share my knowledge and affect 10 million people. We also do charities from time to time and are currently supporting a home for the underprivileged, House of Joy, in Puchong.